The predecessor to this section dates back to 1993 and, in short, it effectively provided that a show cause hearing could be had for the benefit of the creditor for the purpose of determining whether the debtor could be forced to pay rent as a condition to maintaining its defense in a foreclosure suit. A couple of bright attorneys challenged the statute as being unconstitutional on the grounds that it was a denial of procedural due process and that it unconstitutionally allowed the legislature to prescribe procedure which is an area reserved by the Constitution to the courts, thereby violating the separation of powers provision. (The version of the statute they attacked is attached above.) The third DCA bought into the argument, but the Supreme Court reversed while having no problem in concluding that since the procedural aspects of the statute were directly intertwined to its remedial purpose, there was no separation of powers violation. (See Caple v. Tuttle). Based upon the strong negative case law concerning this issue, there is almost no chance of the defense bar likely winning a separation of powers argument. The supreme court also dismissed the procedural due process arguments for reasons which are not that germane to the pending legislation.

Nevertheless, while we thought it might be worth speaking to the bright lawyers who initially prevailed in the 3rd DCA; one attorney is now a sitting judge on the 3rd DCA and out of bounds for purposes of discussion, the other, currently employed by Grey-Robinson.

Which still leaves us with the question does the procedure provided by the pending legislation render it unconstitutional as a violation of procedural due process. For those not familiar with the body of procedural due process law, the devil is always in the details. First of all well over 99% of the law in this area involves state action where the government; be it Federal, State or local is one of the litigants. The courts allow much wider latitude to the conduct of private parties so we start with a very uphill battle. Very rarely have the courts concluded that private actors have not been provided with procedural due process when it has been demonstrated that the allegedly aggrieved party was given notice of the hearing and the opportunity to present evidence.

However, we do think the facts of the foreclosure crisis coupled with some of the language available concerning procedural due process keeps us in the ballgame.

Subject:Draft to Start Public Awareness – Position Statement Bullet Points and Stats

There are at least 5 legislators with a solid background in real estate transactional work. Most Legislators and the Public think: 1) they have time to wait for a more consumer friendly bill before they have to take action and 2) they think that if these houses get back on the market then the market will turn around. They are wrong.

During the course of the session, those legislators with a real estate background should be extremely amenable to persuasive arguments on title integrity being totally undermined by a judicial process which has minimal concern for ferreting out the truth. They need to share their heightened awareness with their colleagues.

The Bill is past the point of making it more consumer friendly. In light of the evidence that has surfaced regarding foreclosure abuses by banks, robo-signing, securitization, fraud (in the inducement too) our legislature should not even consider such a bill. While the public in general feels that there are a lot of people milking the system and living two years or more for free, it is not because of the consumer, but the bank’s conduct.

The proposed legislation is bad for the common good.

As we see it:

· If the Banks and HOAs get everything they wanted from the Legislature this spring there would be economic chaos, because the real estate markets would be flooded with more properties, driving prices down another 25% or more, thereby driving tax rolls way down and bankrupting local governments;

· FACT: 95% of the foreclosure cases are not contested;

· FACT: Yet, it still takes over 600 days for the average foreclosure case to wind its way through the court system;

· The reality demonstrates that banks are the ones who numerically and statistically are the ones most responsible for the slowness in which foreclosure cases move through the system, and the legislation is completely unnecessary;

· The process is already in place, if they followed it, they could have a foreclosure done in 75 -90 days;

· Wholesaling our constitutional rights is not the answer; this creates a summary proceeding, it’s totally unnecessary if the procedures already in place were used properly;

· The procedure provided by the pending legislation makes it unconstitutional as a violation of procedural due process;

· Unfortunately, well over 99% of the law in the area of procedural due process involves state action where the government; be it Federal, State or local is one of the litigants. The courts allow much wider latitude to the conduct of private parties so homeowners start off with an uphill battle. Very rarely have the courts concluded that private actors have not been provided with procedural due process as long as it has been demonstrated that the allegedly aggrieved party was given notice of the hearing and the opportunity to present evidence;

· The facts of the foreclosure crisis, robo-signing, securitization, servicing problems, and fraud, coupled with some of the language available concerning procedural due process keep consumers in the ballgame;

· Every case currently being litigated is under assault with this legislation;

TWO KEY FACTORS IN THE PENDING LEGISLATION THAT CONSUMERS SHOULD BE OUTRAGED AT:

· Section 7 of the legislation provides:

Section 7. The amendments to ss. 702.10, Florida Statutes, and the creation of s. 702.13, Florida Statutes, are remedial in nature and shall apply to causes of action pending on the effective date of this act. Sections 702.11 and 702.12, Florida Statutes, created by this act, apply to cases filed on or after July 1, 2012.

· Make no mistake about it paragraph (1)(a)5 is the dagger. It provides:

State that, if any defendant files defenses by a motion, a verified or sworn answer, affidavits, or other papers or appears personally or by way of an attorney at the time of the hearing, the hearing time shall be used to hear and consider the defendant’s motion, answer, affidavits, other papers, and other evidence and argument as may be presented by any defendant or any defendant’s counsel, and the court shall then make a determination as to whether a preponderance of the evidence and the arguments presented support entry of a final judgment of foreclosure, and if so, the court shall enter a final judgment of foreclosure ordering the clerk of the court to conduct a foreclosure sale.

STATISTICS OF BANK OWNED HOMES – as of January 28, 2012 by Lynn Szymoniak, Esq. on Fraud Digest – Evidence the banks owning more properties is not changing anything

· Home ownership in Florida’s 33 counties with population of 100,000 or greater as of January 24, 2012 is partially set forth here. The 34 counties with populations under 100,000 have a combined population of 1,278,080, approximately the population of Hillsborough County. The home ownership of Hillsborough has been used to approximate the ownership in the 34 counties, you can find the stat on each county at www.frauddigest.com

· FLORIDA HOMES OWNED BY 8 LARGEST BANKS: 22,112

· FLORIDA HOMES OWNED BY FANNIE & FREDDIE: 7,170

· FL HOMES OWNED BY BANK OF AMERICA: 5,143

· FL HOMES OWNED BY WELLS FARGO: 4,727

· FL HOMES OWNED BY DEUTSCHE BANK: 3,114

· FL HOMES OWNED BY BANK OF NEW YORK: 2,855

· In January, 2012, in Palm Beach County, Florida, for example, 11 banks, FANNIE and FREDDIE and one mortgage servicer were the biggest homeowners, with 2,907 homes owned in total. Palm Beach County is the third largest county, by population, in Florida.

· Bank of America and Deutsche Bank were close second and third largest, owning 496 homes and 454 homes, respectively. (The Bank of America total represents homes owned by Bank of America, BAC Home Loans Servicing and Countrywide.)

One Response to “Other details on HB/SB213 The Florida (un)Fair Foreclosure Act background”

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